State-run power generation company NTPC has threatened to curtail power supply to Jammu & Kashmir from February 19 unless the state’s power development department clears dues that have shot up to almost Rs 2,000 crore. Of the total outstanding dues, as much Rs 1,626 crore has been pending for more than 60 days.
As per the regulation notice sent to the electricity distribution company (discom) by NTPC, some of the bills for which payments have not been made were issued as early as February 2018. The state discom’s aggregate technical and commercial losses – an indicator of losses due to pilferage and billing inefficiencies – stand at a staggering 52.8%, against the national average of 21.2%.
Earlier this month, a memorandum of understanding was exchanged among NHPC, J&K power development department and J&K state power development corporation for the execution of the 850 MW Ratle hydroelectric project during the visit of Prime Minister Narendra Modi.
Recently, NTPC has also warned the discoms of Andhra Pradesh, Karnataka and Telangana of trimming power supply due to a rise in unpaid bills. The Andhra Pradesh Power Finance Corporation is issuing bonds of Rs 2,000 crore – backed by unconditional and irrevocable guarantee by the state government – to pay the outstanding dues.
NTPC’s management recently said that it is considering offsetting dues from Uttar Pradesh by picking up the state’s equity in the 1,320 MW Meja power plant. The management also pointed out that payment delays were mostly on account of renewable energy, which is a little bit costlier than thermal power.
Rise in receivables, coupled with `280-crore under-recoveries in the first three quarters of FY19 due to coal shortage, is seen to be putting additional pressure on the power generation behemoth’s financial performance.
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